Both precious metals logged another day of positive gains as Mario Draghi, president of the European Central Bank, provided more hints about purchasing bonds of insolvent eurozone countries. He told lawmakers in a behind-the-scenes meeting at the European Parliament in Brussels yesterday that the central bank has lost control of borrowing costs.
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“We cannot pursue price stability now with a fragmented euro area because changes in interest rates affect only one country, or two countries at most,” Draghi said, according to Bloomberg. “They have no importance whatsoever in the rest of the euro area.” ECB bond purchases are therefore “a way to comply with our primary mandate,” he said, adding: “Frankly, all this also has to do very much with the continuing existence of the euro.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) edged 0.25 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) jumped 2 percent. Gold miners (NYSEARCA:GDX) such as Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX) fell 1.5 percent and 0.75 percent, respectively. Silver miners (NYSEARCA:SIL) such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) gained 2.56 percent and 5.4 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS